INTRODUCTIONUniqueness of an
industry practice poses specific tax challenges and warrants a separate
analysis with careful orientation towards the business dynamics
prevalent in the industry. As part of the Decoding GST series, an
attempt is being made to identify some industry-specific GST challenges
and examine current practices adopted by the industry to tackle such
situations.
Typically, tax issues faced by an industry can be
categorized into the following buckets (a) Classification/Rate of Tax,
(b) Other substantive issues and (c) Procedural issues.
Classification issues arise on account of the description of the goods
and/ or services specific to the said industry. Substantive issues
emerge from valuation, input tax credit, etc. and procedural issues
arise from tax collection/payment, reporting procedures envisaged under
law.
THE AUTOMOBILE SECTORThe automobile sector
comprises of OEMs (including supporting component manufacturers) of
two-wheelers to four-wheeler passenger vehicles, commercial vehicles and
other special purpose vehicles. With the recent spurt in electric
mobility, a sub-vertical of electric motor vehicles manufacturers and
its supporting participants have emerged. The said sector also includes
the dealer network, after market spares and service network as well as
pre-owned vehicle market. While GST has subsumed multiple taxes/cesses
(National Calamity Contingenc
